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25 May 2022, 09:04

PM comments on future of lending rates in Belarus

MINSK, 25 May (BelTA) – Belarusian Prime Minister Roman Golovchenko commented on whether there will be lower interest rates on loans in the country in an interview to Belarus 1 TV channel, BelTA has learned.

“The Russian Federation, unlike Belarus, has substantial reserves to maintain low interest rates. We are working according to the so-called just-in-time system. We are still experiencing the consequences of the events of 2020, the information attack aimed at destabilizing the banking and financial system,” Roman Golovchenko said recalling the then destructive calls to withdraw money from deposits, exchange the Belarusian rubles for dollars and not to buy Belarusian goods.

The main task at that time and now is to prevent the outflow of deposits and funds of individuals and legal entities, the prime minister stressed. “In 2020 we managed to stabilize the situation. In 2021 we followed a very good trend with increasing deposits. Of course, Q1 2022 was turbulent. Since April the trend has changed and today there is no outflow of deposits. Moreover, there is an inflow of deposits,” he said.

According to the head of government, interest rates on loans are formed largely by taking into account the rates on deposits. “Now our people are able to earn high interest rates on deposits, both in Belarusian rubles and in foreign currency. A bank cannot lend out cheaper than it takes in as a deposit. That is the disposition in this market now. However, with regard to home loans with state support, support for large families, the disabled and other categories of citizens entitled to benefits, the state fully meets its obligations and subsidizes interest rates from budgetary resources to make them affordable to people. We understand that we must move down, this is one of the priorities, but at the moment the economic situation does not let us drastically reduce interest rates on loans. Nevertheless, I think there is every reason for them to move smoothly downward. We will definitely see it in the future,” said Roman Golovchenko.

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